The Independent Investor: Lest We Forget
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With the stupendous arrogance that only Wall Street brokers can possess, they are hoping that we will forgive and forget that it was they who precipitated the financial crisis in the first place.
Morgan Stanley took out three full pages of ad space in the Wall Street Journal among other publications to crow that now that the financial world is being remade (thanks partly to their own duplicity and greed) they want to offer you and me "thinking and resources to fit the times." Now that they have wiped out trillions of our retirement savings by urging us to stay the course while they went to cash or shorted the markets, they suddenly want to help us make it back, to give us advice on retirement, education, wealth transfer and other financial needs.
Here's an idea: why not start by returning all the money they lost last year in our brokerage accounts.
Now before you take this the wrong way, I am not blaming just Morgan Stanley and Smith Barney. There is plenty of blame to go around. Citigroup, Bank of America, Merrill Lynch (remember them?) Bear Sterns, AIG, Wells Fargo, UBS as well as another 10 or so megafirms blitzed us, and left few survivors. And yet they walk away while we are left holding the bag. The point is that now that we the taxpayers have bailed most of them out, they are using our money to re-invent themselves, to pretend that it was someone else on the other end of the phone telling us to buy and hold. I, for one, will not fall for it. Once burned, shame on you, twice burned shame on me.
In the meantime, while all this fanfare is occurring, several high-ranking Morgan Stanley executives (including a co-president, their controller and principle accounting officer) sold $2.9 million of stock in May. Recently, an ex-trader at Morgan Stanley in the U.K. was banned by financial regulators for "front-running" (using non-public information to trade ahead of his customers). He was the third Morgan employee banned in Great Britain in the last month.
Sure, I know Morgan Stanley employs a great number of people worldwide so why blame them for three bad apples? Because I do not believe that brokers like Morgan Stanley or any of these organizations that sold trillions in toxic assets to us can change its corporate culture in a few short months.
I suggest that before any of you get sucked into this "new era" of reformed brokers you should take a hard look at how they have treated you in the past. There is a great Web site by a local money manager, Berkshire Money Management Inc., which is well worth your time. You can access it via www.FireYourStockBroker.Net.
"There is a lot of incompetence and greed in our industry," Allen Harris, the president and senior investment officer of Massachusetts-based Berkshire Money Management of Pittsfield said, "and it is not just on the national level, here locally we have the same issues. It's time everyone re-examined and reconsidered who is managing your money. Take a look at my Web site and if your adviser falls short, fire him and call us."
Bill Schmick is a licensed investment adviser representative as well as a registered financial consultant who recently joined Berkshire Money Management. All views and opinions expressed by Bill in his columns are strictly his own. Direct your inquiries to him at 1-518-610-1553 or e-mail him at wschmick@fairpoint.net. You can also visit www.afewdollarsmore.com for more of Bill's insight.
Editor: There was a delay between the column and the release announcing his new job, and the column went up first - without the full disclosure. I had planned to link them together but got sidetracked. Blame me, not him.
OK children, I am cutting off comments that are repetitious or simply name-calling. Grow up.
If you have a grievance or question of either Mr. Harris or Mr. Schmick, I suggest you contact them personally. They are very easy to get a hold off. So am I: Tammy Daniels, 413-663-3384, Ext. 29. See? We use our real names.
